Saturday, April 30, 2011

Inflation, the Silent Killer?

I’ve been talking to myself lately, and mulling around some Len Penzo stuff. He’s one financial blogger I follow regularly, always thought provoking. A while back he suggested inflation was the government’s way to tax individuals without showing the bruises. Current government obligations will be paid in post inflationary dollars while interest rates charged on their loans remain relatively low.

He mentioned in another post, if we took the 1970 criterion used to track inflation, costs are actually up 9.6% over last year. Yet according to government stats, the current CPI (Consumer Price Index), is 2.1% . It’s based on a newer “typical shopping basket” which skews results. Why is this important? The CPI is used to calculate our “inflation rate”. That rate determines social security benefits, other “entitlements”, and many times governs the “cost of living” salary increases in the private sector.

Another Len Penzo post included individual stats for commodity changes over the last year on coffee, wheat, cotton, sugar, gasoline, etc. It’s a more accurate indicator of present/future price increases as retail prices generally follow wholesale. I went to his source last week,, and found this info. Pork bellies, up 30.55% over a year ago, unleaded gasoline, up 31.79%, heating oil, up 44.26%, sugar, up 57.89%, wheat, up 60.50%, corn, up 103.38%, coffee, up 121.51%, feeder cattle, (where your hamburgers come from), up 18.%, cotton, up 124.63%. So kiddies, now you know why Mom is rationing your Sugar Gobs cereal.

According to the US Census Bureau, the average household income in 2009 was $49,777, down from $50,303, in 2008 and $50,233 in 2007. It was $48,201 in 2006. The 2010 stats aren’t in yet, but they won't be pretty.

To clarify, a household is defined as one or more persons living together. The current US average is 2.63 people, and slowly rising, as kids stay home longer and older folks move in with the kids. It’s crazy. We’re being squashed from three directions. All these stats together means less money per person to pay for more expensive goods.

So how do we handle it? We can gripe. We can worry. Panic even. We can demand our legislators act wisely, budget within incoming revenue. (No guarantee they will.) Write letters to the editor. Stockpile. Buy gold. We can scramble for alternative housing situations. Live in treehouses. Squat in abandoned buildings. Build tiny portable homes. Start communes. Go off grid. We can try other ways of obtaining needed goods. Borrow. Share ownership. Rent. Barter. Become freegans. Forage. We can tighten our belts across the board, scrimp and save. We can develop a “side hustle”. We can divert personal resources from wants to needs. We can put in a Victory garden and keep chickens.

We can do tons of things, but what if they don’t work? Have we considered God is getting our attention by hemming us in? The thing that owns our thoughts, has our worship. (I’m talking to myself here.) What if we focus on him and ask for wisdom? We may end up doing many of these same things, but at least our priorities will be right. While everything else is throwing temper tantrums for our loyalties, why not seek him? Could comfort be the real killer, the thing that has us by the tonsils? What if we take to heart the verses,”I can do all things through Christ who strengthens me” or “Your heavenly father knows you have need all these things, but seek first his kingdom and his righteousness and all these things shall be added unto you”. What if?

Friday, April 22, 2011

Spring Cleaning

It’s not just wiping dirty windows or replacing smoke alarm batteries. I’m convinced stuff breeds in dark corners over the winter months. In spite of my best efforts, yard sales are not a good way to divest. I've tried individual, multi-home, and neighborhood sales with poor results. This, in spite of low prices, clean pieces in good shape, and enthusiastic promotion. We live in an upper middle class suburban neighborhood. So it's not as if people fear for their lives or wallets. It makes no sense.

Frankly, I've done better by lugging stuff and pairing with other people in more trafficked places. One friend lived in a manufactured home park on a corner property, another in an expensive neighborhood, another on a major thoroughfare near a large grocery store. It's all a matter of what people expect to find, where.

Craigslist is another option for clearing clutter, with free listings and photos. We posted yard sale leftovers there and had better than 50% success. Far less hassle than yard sales. CL is good for larger household items in good condition. A posting method I'm considering is to remove a listing after a week and re-post it so that it stays current.

In desperation we’ve done the paid method. We work with an Ebay fellow who charges 30% of the profit and all fees. Yes, a bit steep. But we’re also paying for his track record of positive feedback, photos, write ups, packaging and mailing out. Ebay is better suited for quality pieces that photograph well and are easy to ship. It’s success rate is less than 50%. But we got some surprisingly good results on things that did move. However the fees are killers on non-sellers. To figure if it’s worth it, track like items and see how the bidding goes before listing your own. Some tricks. If you post on Thursday with a ten day span you get the advantage of two weekends. If you hold off, September through November are prime time for giftable items. I image textbooks would be hot just before the school year starts and clothes appropriate to the season.

There are still choices with leftovers. Write up an inventory and give your stuff to the Salvation Army or Goodwill for a tax write off. There are standard tax deduction amounts listed on the Goodwill site .(

If getting cash back is not an issue, offer pieces on freecycle. Or put them out on the curb with a “free” sign, hang out the window, and see how long they stay there until someone picks them up.

Anyway you handle it, your home gets some much needed breathing space.

Saturday, April 2, 2011

Wanna Be A Coupon Queen?

You want to save a bundle and are bollixed up by the coupon industry? Let’s take the guy head on.

Where do you find them?

Online on coupon sites. Friending product manufacturer's on Facebook. Buying the Sunday paper. By calling a manufacturer’s toll free number and asking for them or giving feedback. Trashpicking. Purchasing returned Sunday papers in bulk at the publisher (often by weight). Trading with friends. In the mail. Through entertainment books. Asking on freecycle

How do you organize them without driving yourself crazy?

Alphabetically my dear Watson. File them in a recipe box with lettered partitions by product name. They'll be much easier to retrieve. Then once a month go through your stash and pull expired ones.

What’s the best way to use them?

If you’ve ever formally tracked prices in your area stores, you know there can be a huge price range on similar items. So the trick is to get the best overall price. The “perfect storm” combination is a manufacturer’s coupon coupled with a store coupon on a sale item. Some stores allow you to use coupons on damaged packages or pulled items in the discount bins. Now you’re really talking my language. Some stores double coupons up to a certain amount. But if you get one of those printouts that say “$5 off your next purchase” you’re up there with the coronated wonders. Now the product manufacturers know all this stuff and they’ve been playing hardball. When a coupon used to say 50 cents off one, which can be doubled at some stores, it reads $1 off two, which can’t. And knowing when they will reduce a wholesale price on an item, thus influencing retail prices, manufacturers make their coupons valid for different time slots. One trick is to pay attention to the beginning and the end of expiration dates. So if your store changes prices mid-week, you might have a sliver of time when the coupon overlaps a sale.

That should be enough for now. We’ll save rebating for another day.